Piketty: CAPITAL in the Twenty-First Century (2013);
- Title: CAPITAL in the Twenty-First Century
- Author: Thomas Piketty
- Published: 2013
- Publisher: The Belknap Press of Harvard University Press, Cambridge, Massachusetts
- Translated: Arthur Goldhammer (2014)
- ISDN-13: 978-0-674-43000-6
Piketty’s “CAPITAL in the Twenty-First Century” aims that there is a scientific approach to determine what (economic) factors cause inequality of wealth. Piketty relies on statistical and historical data to back up his hypothesis.
His main ideas are
- If the income comes more from capital than labor, the inequality of wealth increases.
- α = r × β
- α: the share of capital income in national income
- r: the average rate of return on capital
- β: the capital/income ratio
- If the ratio of capital/income (β) increases, the inequality of wealth increases.
- β = s/g
- s: savings rate
- g: growth rate
- The higher the growth rate, the less ratio of capital/income – long term effect
The solution is the Progressive Tax nationally and globally, especially for income from capital.